WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: The USD remained under pressure against its major currency peer while US Treasuries’ positive reaction to the less hawkish than expected FOMC monetary policy statement was short-lived. The EUR/USD extended its post-FOMC gains supported by ECB Governing Council member Ewald Nowotny’s comments that the Central Bank would decide “when the time comes” whether to raise interest rates before or after ending its bond purchase programme. Elsewhere, the GBP also firmed against most of its currency peers after MPC policymaker Kirsten Forbes surprised investors by breaking ranks and voting in favour of a rate hike at this week’s monetary policy meeting, representing the first split on the MPC since July of last year.
GREECE: In view of the 20 March Eurogroup, different views as to the state of play in the negotiations and the timeline ahead are reportedly expressed by the Greek side and the institutions. In particular, according to press reports the Greek FinMin expressed optimism that a “global agreement” comprising the staff-level agreement, the specification of the medium-term debt relief measures and the determination of the duration of the post-programme period for maintaining the 3.5%-of-GDP medium term primary surplus target is possible at the April 7 Eurogroup. On the other side, according to press reports, a high-ranking European official appeared cautious as to whether an agreement could be possible in April given certain time restrictions pertaining to the Easter recess and the IMF Spring Meeting (21-23 April).
SOUTH EASTERN EUROPE
CESEE MARKETS: The emerging markets rally instigated earlier this week in the wake of the FOMC meeting and the Dutch elections appeared to be running out of steam, with most EM assets trading mixed earlier on Friday. Today focus is on Moody’s review of Serbia’s sovereign credit rating, with an upgrade appearing to be on the cards.
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